You won’t believe which Xbox studios were just shut down — and why Microsoft says it needed to do it.
What insiders say is behind the recent studio shutdowns
Journalist Jason Schreier reported to Bloomberg that the recent closures of Tango Gameworks, Arkane Austin, Alpha Dog and Roundhouse are part of an ongoing Microsoft cost-cutting effort. Schreier wrote that this week Xbox began offering severance packages to producers, QA testers and other ZeniMax staff, and that additional cuts were being signaled to other employees across the organization.
How Tango’s closure shocked industry watchers
Tango Gameworks’ shutdown caught many by surprise. The studio’s last release, Hi-Fi Rush, performed strongly: it reached roughly three million players and accumulated several accolades, including a BAFTA for best animation and audio awards at The Game Awards and the Game Developers Choice Awards. Sources told Schreier Tango was already working on a sequel, making its closure especially puzzling to observers.
What Xbox leadership said about Tango and resources
Matt Booty, head of Xbox Game Studios, explained the decision by saying some studios had become too numerous for the division to support and that studio leaders felt understaffed. Booty framed the move as a way to “free up resources” to redirect elsewhere inside the company. He also has publicly argued — in comments picked up by The Verge — that Xbox needs “smaller” projects that deliver prestige and awards, pointing to Hi-Fi Rush as an example of a title that brought critical recognition.
Arkane Austin: closure despite past pedigree
Arkane Austin, known for Prey, Redfall and the original Dishonored (developed with Arkane Lyon), was also closed. Booty denied the decision was simply a reaction to Redfall’s poor sales and reception. Bloomberg sources said Arkane Austin had been attempting to return to the immersive-simulation style that made Dishonored successful, working on a new project in that vein. Like Tango, Arkane had been recruiting talent for its next game before the shutdown.
Staffing strain cited as a central problem
Both Booty and Jill Braff, director of ZeniMax studios, emphasized that hiring activity and a thin central team were major factors in the closures. Braff noted the difficulty of supporting nine studios around the world with a small central staff and an increasing list of priorities, and said Bethesda and ZeniMax would refocus on fewer projects going forward.
How many jobs are affected and the wider layoff context
Exact counts for the most recent studio closures haven’t been released, but they add to earlier rounds of cuts at Microsoft. At the start of the year the company eliminated about 1,900 positions across ZeniMax, Xbox and Activision Blizzard — a reduction that represented roughly 8% of its workforce in the gaming divisions. Schreier reported that internal communication around this latest wave was chaotic: many employees were reportedly unsure whether they would be included in the cuts even a day after the news broke.
Additional corporate role reductions and public notices
A memo from Matt Booty published by IGN confirmed that a small number of roles in certain corporate and Bethesda publishing teams will be removed. It remains unclear how many people those changes will affect or whether those teams have been fully informed of their status.
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Logan Whitmere is a gaming enthusiast who lives and breathes video games. Whether it’s reviews, gaming tips, or news about the latest releases, Logan’s passion and expertise bring the virtual world to life for every reader.